Committee of Creditors Unanimously Approves Liquidation; New Liquidator Appointed as Per 2026 IBC Amendments
In a significant development under the Insolvency and Bankruptcy Code, 2016 (IBC), the National Company Law Tribunal (NCLT), Mumbai Bench, has ordered the liquidation of European Projects & Aviation Limited, citing the absence of any viable resolution plan within the prescribed insolvency resolution process period. The order, dated September 3, 2026, arises from the application filed by the Resolution Professional (RP), Mr. Laxmikant Yeshwant Desai, under Section 33 of the IBC.
The insolvency proceedings were initiated following a petition by Dabir Developers Private Limited, the Financial Creditor, under Section 7 of the IBC in September 2024. Despite multiple efforts, including public announcements, creditor meetings, and due diligence processes, no resolution plan materialized during the Corporate Insolvency Resolution Process (CIRP), which commenced on March 27, 2025, and expired on September 23, 2025.
The Committee of Creditors (CoC), holding a 100% voting share, unanimously resolved in its 5th meeting on September 9, 2025, to initiate liquidation proceedings against the Corporate Debtor due to the company's prolonged inactivity, absence of employees and assets, and lack of interest from prospective resolution applicants. The CoC also approved estimated liquidation costs and authorized the RP to file the necessary application.
The Tribunal, after considering submissions and relevant statutory provisions, affirmed that in the absence of a resolution plan, the Adjudicating Authority is mandated under Section 33 of the IBC to order liquidation. Importantly, an amendment in the Insolvency and Bankruptcy Code (Amendment) Act, 2026, prohibits the appointment of the RP as the Liquidator in such cases. Consequently, the Tribunal appointed Mr. Sandeep D. Maheshwari, an Insolvency Professional from the Insolvency and Bankruptcy Board of India’s panel, as the Liquidator.
The order mandates the Liquidator to take control of the Corporate Debtor’s assets, continue or initiate proceedings related to any avoidance or fraudulent transactions, and comply with all procedural requirements under the Code and relevant regulations. A fresh moratorium period was also declared, effectively freezing any legal proceedings against the Corporate Debtor during liquidation.
This judgment underscores the rigorous framework of the IBC in ensuring timely resolution or liquidation of insolvent companies to protect creditor interests and uphold commercial certainty. The case also highlights the procedural changes introduced by the 2026 amendments, especially concerning the appointment of liquidators, ensuring greater independence and transparency in the liquidation process.
Bottom Line:
Liquidation proceedings under Section 33 of the Insolvency and Bankruptcy Code, 2016, initiated due to the absence of a Resolution Plan, with 100% approval from the Committee of Creditors (CoC).
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 7, 21, 30, 31, 33, 34, 35; Insolvency and Bankruptcy Code (Amendment) Act, 2026; IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; IBBI (Liquidation Process) Regulations, 2016
